Select Committee on Social Security Minutes of Evidence

Memorandum submitted by Mr Nicholas Mostyn QC on behalf of the Family Law Bar Association (CS 20)


  The proposed simplification of the formula will not be acceptable to the separated/divorced public unless it is accompanied by a significantly more liberal departures regime than that proposed. Adjudication under the new departures scheme should be done by independent judicial tribunals rather than by officials if the Human Rights Act is not to be breached.

  To permit parents in a non-benefit case to overthrow a private agreement relating to child support on giving 14 months notice will lead to less ancillary relief cases settling and more litigation funded by the tax payer. It also defies the merit of encouraging parties to resolve differences between themselves.

  The proposed significant reductions in the current levels of child support in all cases save those involving the rich is insupportable. The new rates do not appear to be the result of any considered research or empirical analysis. They will lead to children being under-maintained in the majority of cases.

  The proposal to leave out of account the income of the parent with care is demonstrably unfair and will lead to considerable discontent. As the Australian experience shows, it can be incorporated into a new simple formula without difficulty or by creating any degree of complexity.

  The failure to impose a maximum ceiling on the payer's liability is bizarre and amounts to crude social engineering. Children do not have a right to share in their parent's income.

  The proposals for reform fail to explain how either shared care or serial non-residential parents will be treated.

  The proposal to leave out of account unearned income in the assessment of income is unsupportable.

  1.  The Family Law Bar Association is the professional body of Barristers who practise in Family Law. It has about 2,000 members. I have been given responsibility for formulating the stance of the FLBA in relation to the proposed reforms of the CSA.

  2.  I was called to the Bar in 1980; I was appointed QC in 1997, and was made an Assistant Recorder in the same year. I am a member of the Lord Chancellor's Advisory Group on Ancillary Relief and of various other working parties. I am an editor of At A Glance and of International Family Law.

  3.  In tune with current demands of transparency and openness I would wish to state that in addition to my role within the FLBA as person in charge of Child Support matters, I have at all times since the inception of the existing CSA scheme been deeply involved in it. I have written one of the principal text books on the topic (Child's Pay—2nd edition 1997), I produce eponymous software for undertaking the calculations, and during the last Conservative administration I acted as an adviser to Mr Andrew Mitchell in his capacity as CSA minister, and as such assisted in the drafting of the 1995 Act and of the various sets of Regulations issued under the last Government.

  4.  I have not had any role or influence direct or indirect in the formulation of the current proposals. In my capacity as FLBA member in charge of CSA reforms I have submitted a paper to the DSS on the Green Paper proposals, and that paper formed the basis of a speech given by me to among others Lady Hollis and her advisers at a QMC seminar held on 23 October 1998. I attach that paper hereto as Annex A.

  5.  In the paper I identified five areas of grave concern in relation to the proposals for reform as set out in the Green Paper. They were:

    5.1.  The proposed simplification of the formula is inevitably going to lead to a repetition of history with incessant demands from particular groupings of parents that their particular circumstances have been unfairly overlooked, unless it is accompanied by a liberal departures regime (see Paragraphs 7, 11, 12, 13, 14).

    5.2  There was a failure of the Green Paper to confirm the continuation of the existing ability of parents in non-benefit cases to contract out of the system and to make a private agreement between themselves which would thereafter be variable by the Court (see Paragraph 10)

    5.3  There would be significant reductions in the current levels of child support in all cases save those involving the rich (see Paragraphs 16-19).

    5.4  The income of the parent with care is left out of account (see Paragraphs 20-24).

    5.5  There is no maximum ceiling on the payer's liability (see Paragraphs 25-26).

  6.  Although I felt that each of these points had real objective merit I was sorry (but not altogether surprised) to read in the White Paper that almost all of them had been brushed aside.

  7.  Simplification of the formula

    7.1  I do not dispute that the present formulae are too complex. As I explained in my paper it is the product of appeasement by the previous administration to manifold groupings of aggrieved parents. When the departures system was introduced by the 1995 Act it should have been accompanied by a simplification of the formula back to its original basics and a transference of those excised elements into the departures system. The failure to do this left the system saddled with the worst of both worlds.

    7.2  I do not therefore dispute that some simplification of the system is called for. But it seems to me to be axiomatic that if a repetition of history is to be avoided the simplification must not be demonstrably unfair to any particular groupings of parents, and must be accompanied by a liberal departures regime.

    7.3  As I believe I will demonstrate below there are at least three areas in which the proposed reforms will be demonstrably unfair to significant groupings of parents. Moreover, the proposed departures regime, as set out in Chapter 6 of the White Paper, will if anything be more restrictive than the existing regime.

    7.4  The existing departures regime, operating, I emphasise, with a much more sensitive and less crude formula than that proposed, takes account of:

    a.  travel to work costs;
    b.  contact costs;
    c.  illness or disability costs;
    d.  pre-separation debts;
    e.  pre April 1993 commitments;
    f.  costs of supporting other children;
    g.  capital settlements;
    h.  non-income producing assets;
    i.  diverted income;
    j.  lifestyle inconsistent with income;
    k.  unreasonably high housing costs;
    l.  unreasonably high travel costs;
    m.  failure of a partner to contribute to housing costs;
    n.  unreasonably high travel costs.

    7.5.  By contrast the new regime will only take account of
    a.  contact costs;
    b.  disability costs of a child in the second family;
    c.  pre-separation debts;
    d.  maintenance costs (other than fees) of the child while at boarding school;
    e.  commitments in discharging the mortgage on the former matrimonial home;
    f.  pre April 1993 capital settlements;
    g.  non-income producing assets;
    h.  diverted income;
    i.  lifestyle inconsistent with income.

    7.6  I fail therefore to understand how a cruder formula coupled with a more restrictive departures regime will not lead to the kind of public outcry that accompanied the introduction of the existing scheme in 1993.

    7.7  A worrying aspect of the proposed departures scheme is that Paragraph 18 of Chapter 6 proposes that where the facts are known the discretion to vary the liability and to award a departure will be vested in an official. It is of course the case that under the existing regime the power to determine a departures application may be made by the Secretary of State (ie an official) or may be referred to a CSAT. So the criticism I am about to make applies equally to the existing system as to the proposed system.

    7.8  In October 2000 the Human Rights Act 1998 comes into force. This incorporates the European Convention on Human Rights into domestic law. Article 6 of the Convention provides:



    1.  In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.

    I am at a loss to understand how the judicial power to determine the civil obligation of a parent to pay child support under the departures scheme can be vested in an official without offending Article 6 which prescribes a "fair and public hearing within a reasonable time by an independent and impartial tribunal established by law".

8.  Private agreements in non-benefit cases

    8.1  The present system encourages parties to work out their own solutions and to make a private agreement. This agreement can then be entered as a consent order, and will from that point onwards only be variable by the court. This facility exactly mirrors the Australian provisions which are (so far as I am aware) universally accepted over there as being helpful and constructive.

    8.2  The encouragement of private agreements is a cornerstone of existing divorce law (whether or not Part II of the Family Law Act 1996 is ever implemented).

    8.3  The Government has gone some way to confirming the continuation of the existing system but there is a sting in the tail.

    8.4  Paragraphs 21 and 22 of Chapter 8 confirm the continuation of the existing arrangements. But Paragraphs 23-25 will allow either parent, once a court consent order has been in place for a year, and on giving two months notice, to back out of the private agreement, and to have the child maintenance assessed by the CSA under the new rates.

    8.5  The reason given in Paragraph 25 is to encourage parties to negotiate their agreements

    "in the shadow of the CSA. All parties will know that either parent can turn to the CSA in future, and that it will therefore be sensible to determine child maintenance broadly in line with CSA assessment rates".

    8.6  I would suggest that there is a failure of logic here. At present parties negotiate their agreements in the shadow of the CSA because each knows that unless accord is reached either may seek an assessment. For this reason each party will have calculated the likely CSA liability before embarking on negotiations. For the better off, reference will be made to maximum CSA liabilities as published in Table 9 of "At A Glance", a copy of which is attached as Annex B.

    8.7  But in very many cases compromise is reached which involves a departure from CSA liability. There are many reasons why this may be so. For example the father may assume the liability for the payment of school fees, or of the mortgage on the former matrimonial home, or the mother may be given a greater proportion of the capital than might otherwise be the case. It is important to understand that the child maintenance element will be but one ingredient of a number of interlocking and balanced factors which will include the wife's own maintenance entitlement, her capital entitlement, her pension entitlement and so forth. When the parties settle they know that any variation of child maintenance will only be effected by the Court, and that the Court will look at the whole picture including the basis on which the original compromise was reached.

    8.8  This ability to reach a sensitive personal compromise of the financial issues dividing the parties will be severely undermined if either party is afforded the right to overthrow the child maintenance settlement and to seek a full CSA assessment after only 14 months. I can confidently predict that it will lead to more cases not settling in their other aspects and the Court being called on to decide them (in many cases at the tax payers' expense through legal aid) when they would otherwise have settled. Moreover, the underlying premise that parties should be dictated to and told to settle their cases in line with CSA rates, when they are happy to agree something else, is an unwarranted example of statist nannying. The existing system works exceedingly well; practitioners are fully familiar with it; and the Government has offered no explanation whatever as to why it should be changed.

9.  Reductions

    9.1  The Government has never explained from where its new rates of 15 per cent and 20 per cent have derived. I suspect that they have been plucked out of the air. Certainly their effect is to reduce significantly the levels of child support that will be paid to mothers or the tax payer in average cases. I have set out the figures in my paper (see Paragraphs 16-19 and Appendix 1). The Government's own figures (Chapter 2 Paragraph 23) admits that there will be significant reductions in the average assessment from £38 to £30.50.

    9.2  It is said in Chapter 2 Paragraph 5 that the 15 per cent rate is roughly half what an intact family will spend on a single child. If the paradigm-model of the intact family is of one wage-earner and one home-carer then it follows that the effect of the reforms is to cut in half the standard of living of the child following separation and to award the parent leaving the home with a significant windfall.

    9.3  In Paragraph 19 it is said that the existing rates of liability are high compared to other European jurisdictions. I do not have access to the work quoted and so I cannot comment on it. I am able to state however that the rates proposed are in their effect significantly lower than Australia (where there are two or more children involved) or in a number of states in the USA where a percentage impost is utilised.

    9.4  The main reason offered for a reduction of the liability is (Paragraph 20) to seek to encourage a higher rate of compliance. I have sought to argue in my paper that this is cynical and unprincipled. In any event I am not at all convinced that there is necessarily a causal connection between the rate of liability and the rate of compliance. Research in the USA has shown that the rate of compliance is much more reactive to the robustness of the enforcement procedures, and that where imprisonment, removal of driving licences and publicity in the local media are deployed against defaulters the rate of delinquency falls dramatically.

    9.5  At all events, after having done this work for some 20 years I am convinced that by English lights the present rates of liability as illustrated in Annex A.1 and A.3 of my paper are about right, and that the proposed future rates are too low, and will lead to children being significantly under-maintained.

10.  Carer's income left out of account

    10.1  In my paper (Paragraphs 20-24) I sought to explain the utter and self-evident injustice of what was being proposed, namely that a father (say) would pay the same whether his former partner was on benefit or was earning a massive City salary. I was therefore very disappointed to read the peremptory dismissal of these concerns in Paragraphs 32-34 of Chapter 2.

    10.2  The arguments of the Government can be summarised as follows:

    2.1  The parent with care already contributes to the cost of care of the children by bringing them up in her own home.

    2.2  To bring into account the carer's income would make the new scheme much more complicated.

    .2.3  It would bring about calls to take into account the income of a new partner.

    2.4  The practical effect would be minimal as only 6,000 parents with care who currently have a child support assessment have an income in excess of £200 per week. "To create complex rules for such a small group is undesirable and unnecessary".

    10.3  The first argument was articulated in the Green Paper. It is devoid of logic. I sought to expose this, I believe effectively, in my original paper. The Government has not sought to meet these arguments for the simple reason that they cannot be met.

    10.4  The second argument is equally hopeless. The Australians have devised a very simple scheme for dealing with the problem. What they do is to establish a level of income on the part of the carer below which it would have no impact. Above the level the non-resident parent's income is reduced $ for $, subject to him paying a prescribed minimum. In my Appendix 3 I suggested a similar solution. For one child I suggested a rate of 25 per cent instead of 15 per cent, but where the mother's income exceeded £150 per week net, 25p of every £1 excess would be subtracted from the father's net income (subject to a minimum of 25 per cent of the calculation if mother had no income). For 2 children I suggested that the rate should be set at 27 per cent and for 3 or more children at 30 per cent, subject to the same rules about reductions. One can of course argue about the percentages, but the concept of reduction of the father's income is extremely simple.

    10.5  The third argument can be quickly dispatched. If the statute says that it is to be left out of account, then it will be. It is left out of account in Australia and no-one seems to complain about it.

    10.6  The fourth argument is sinister and worrying. It implicitly asserts that it is acceptable to sacrifice the right to fairness of as many as 6,000 non-resident parents in order to achieve the expediency of total simplicity. In any event far far more parents than 6,000 will be affected, by virtue of the abolition of the unassailable private agreement as referred to above.

    10.7  I would urge the committee as strongly as I can to invite and advise the Government to abandon its opposition to the bringing into account of the income of both parents when calculating liability for child support.

11.  No maximum

    11.1  The Green Paper was not explicit that there would be no maximum. Lady Hollis told me at the QMC seminar in October 1998 that the Government had not made up its mind on the subject.

    11.2  I had hoped that the utter folly and injustice of there being no maximum was comprehensively exposed by my paper (see Paragraphs 25-26). I was therefore shocked to read Paragraphs 35-36 of Chapter 2.

    11.3  The Government's justifcation for having no maximum can it seems be summarised in the single sentence: Children have a right to share in the income of their parents.

    11.4  Children have no such right. They may have an expectation, and the empirical reality is that in most cases they do, but they have no such right. Their only right is to be maintained. To introduce such a right of sharing into English law is of enormous social consequence. So far as I am aware no other legal system has ever admitted it. It is true that certain continental systems adopt the Roman law concept of legitim, (eg in Germany the Pflichteilricht) whereby a child is guaranteed a certain proportion of his parent's estate on death whatever the content of the will. But that is a far cry to giving a child a right during his parent's lifetime to a certain proportion of his parent's income. Will this right entitle a child who has lived his childhood in an intact family to seek, on attainment of majority, of an account of the sums expended of his benefit, and payment to him of any surplus? Will he be able to sue for his full 15 per cent?

    11.5  The Committee should not underestimate the profundity of what is being proposed. It is the crudest form of social engineering; of inter vivos wealth distribution. It may only affect the very well off, but the rate of relationship failure is as high at that end of the social spectrum as it is at any other. I see about 200 clients a year, the majority of whom are well off. In a number of cases the result will be child support of hundreds of thousands of pounds a year. This cannot be justified; it will bring the system into disrepute; and it dishonours its proposers.

12.  Other points

    12.1  It is not clear to me how the system of shared care will work (Chapter 7 Paragraph 13) when there is more than one child and the children spend different periods with the non-residential parent. Consider, for example, that a father's oldest child stays with him for one night per week, the other two children from two nights per week. Do you reduce his maintenance by the longest period of 2/7ths? Do you take an average of 5/21 or do you stick with the majority: two children and thus 2/7ths?

    12.2  How will the system work for the serial non-residential parent? A man might father a child with M1, and then with M2, and then with M3. He might now be living with M4 by whom he has a further child. The White Paper simply does not admit that this is possible. The only scenario that it accepts is where F has left M1 and is now living with children with M2. For all its other faults the existing multiple Assessment procedures under the present system addresses multiple units logically and fairly.

    12.3  I attach as Annex C calculations that show that there are three different ways in which the Government's proposals can be interpreted in the case of a serial non-residential parent, each of which has serious conceptual problems.

    12.4  It is extraordinary that child support maintenance liability will ignore unearned income (Annex 2 Paragraphs 8 and 9). The arguments that only a few parents have such income, and that it is too complicated to assess are absurd. These considerations do prevent the Inland Revenue from assessing liability to income tax. The White Paper has proposed that unearned income can feature only as an application for departure by the parent with care, but only where the unearned income is "significant" (Chapter 6 Paragraph 11), but fails to stipulate the boundary between significant and insignificant investment income.

10 August 1999

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